Kickstarting this week’s Business Finance Bulletin, the Recovery Loan Scheme has had a quiet start since its launch but the number of lenders on the panel is now slowly increasing. We look at the latest additions and what continues to hold the Scheme back.

The Start Up Loan Company is encouraging younger people to think about becoming entrepreneurs. This is off the back of an analysis of the 80,000 loans they have distributed which reveals a large portion have gone to new business owners in the 18 to 24 year old age range. How could the loan assist you?

To close, a look at findings from the latest Lloyds Bank UK Recovery Tracker, which uncovers that the UK’s key sectors are back on the path to growth.

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If you prefer to read about this week’s news, here’s a transcript of the content…

More lenders offering the Recovery Loan Scheme; young and budding entrepreneurs encouraged to look at a startup loan; and key UK sectors of back on the growth trajectory. All of this in the latest Business Finance Bulletin.

Recovery Loan Scheme Lenders

The Recovery Loan Scheme launched on the 6th of April, and there hasn’t been an awful lot of noise in the marketplace as regards how successful or otherwise that it’s been. Before we take a look at why this is, let’s remind ourselves quickly of the key features of the Recovery Loan Scheme.

It’s designed to help promote growth, so if you’re looking for additional working capital or cash; buying plants and equipment and machinery, then this is the loan for you. If you don’t want to provide a personal guarantee, you can borrow up to a maximum of £250,000 with no personal guarantee. If you’d want to borrow more than your guarantee would be limited to 20% of the balance.

The interest rate is capped at 14.99% and in terms of the loan term, it depends on the type of product you take be it would be a maximum of three years or a maximum of six years.

Demand at the moment, is still a bit muted and it’s all down to the makeup of the panel. During the early days, it was really only the high street banks and a few other niche players but over the last couple of weeks, we’ve started now to see lenders coming on to the scheme, having applied for and being accredited by the British Business Bank.

The panel, as I record this, now stands at 27 lenders and the recent additions include Triodos bank, Atom bank and Synergy bank, so we’re starting to see some activity coming through.

However, one thing to bear in mind is that the appetite to support is going to be quite varied. The high street banks, well they’re probably going to be quite tough. The other ones are focusing on particular products, but also some of them are being very careful by saying it’s open for only existing customers.

Some of them are saying you have to provide security, which is a bit strange considering the government’s giving an 80% guarantee; a bit bizarre.

So you can see the panel is quite tight and there’s going to be reasons for you to really look closely at each of them to see whether it fits your needs.

If you want to know which lenders are on the panel, just go along to the British Business Bank website, which is www.british-business-bank.co.uk.

Alternatively, of course continue watching this Bulletin and periodically I’ll be telling you about all the new lenders who are coming on the Scheme.

Start Up Loans for Young Entrepreneurs

In the pandemic, one sector of society that has been hit particularly badly are the millennials. These are the 18 to 24 year olds who’ve been hit hardest when it comes to unemployment with them taking the brunt of job losses.

Well, the Start Up Loan Companies, is launching a campaign to encourage these 18 to 24 year olds to not necessarily think about getting a job, but perhaps to think about starting a business.

If you are starting a business, of course, some startup capital will always help and that’s where the Start Up Loan Company comes in.

Since it’s been going since 2012, of the 80,000 successful loan applicants they had, 54% of them have been unemployed and of all of that 54%, 31% of them were 18 to 24 year olds.

Now, interestingly, over the last year, the number of people applying for this in the 18 to 24 year old range range has doubled compared to 2019. So we can see there’s a lot of interest from young people in terms of starting a business. And this is what the startup loan company is hoping to tap into.

If you are in that age bracket and you’re looking to start a business, check out startup loans, it’s a great product.

If there’s four of you, each of you can have a maximum of £25,000, or if you’re on your own, it’s a maximum of £25,000. The interest rate is 6% and you can pay the loan back over five years. Great interest rates and a great loan term.

If you want to know more, just go along to their website, which is www.startuploans.co.uk

Back on the Growth Path

According to the latest Lloyd’s bank UK Recovery Tracker, all the key sectors in the UK economy are starting to look at growth again.

Their latest report for April highlights that of the 14 sectors they regularly monitor, all 14 of them reported positive growth output in the month of April. Now that is the first time since August, 2018, that all 14 sectors have recorded growth. In March it was 11 sectors recording growth. So you can see there’s now been a further increase, which is great news for the economy.

Which sectors are leading the pack? Well it’s manufacturing and also technology. Those are the ones that grew by the largest amount.

However, what is even more encouraging that 13 of the 14 sectors though have reported growth plans over the next 12 months, which is going to exceed that recorded by their global counterparts. So it does appear that UK entrepreneurs and business owners are feeling a lot more optimistic and a lot more bullish than their overseas competitors.

Overall really good news for the UK economy, which means that hopefully we’ll finish 2021 with some very strong figures.

Wrap Up

Well, that’s it for another Bulletin and as ever, I hope you enjoyed watching it, and if you did please don’t forget to subscribe to this channel or hit the like and share button.

I look forward to being with you again, next time.

As the economy kicks back into action, it’s not only businesses which are feeling more confident. Opening this latest Bulletin, we look at a number of lenders who are offering increased support to small businesses with new funding pots and enhanced terms.

Have you tried opening a business bank account during the last 12 months? If you have then no doubt it was a frustrating experience. The government seems to think so as well with the launch of a Treasury Select Committee investigation. What are they asking of the High Street banks?

To close, in the latest Lloyds Bank Recovery Tracker further good news about an improvement in business recovery. One sector stands out in seeing the signs of an early bounce back.

If you would prefer to listen to the podcast version you can click below or download to listen to later via our Soundcloud, Google, Spotify, Stitcher or itunes channel.

Here also is the transcript of this latest Business Finance Bulletin…

Increased access to finance for small businesses; banks questioned about their opening of new bank accounts; and business recovery starting to look strong. All of this in the latest Business Finance Bulletin.

Small Business Finance Support

It the weeks go by and I speak to more and more business owners, there’s one theme that’s constantly coming out and that’s an increased level of confidence. Yes, business owners are feeling a lot more optimistic about the future, and it’s not only business owners who are feeling more confident; it’s also lenders.

Over the last week or so, I’ve seen more lenders coming out and saying that they want to support businesses with increased access to finance. So let’s take a look at a couple of these examples. First up Bibby Financial Services. Bibbys are an invoice finance provider, and they’ve announced the creation of the Pandemic Recovery Fund. They’ve put aside £300 million to support small businesses. This is on the back of a survey they’ve carried out where 66% of small business owners say that they anticipate business being back to pre-COVID levels by September. Obviously all of that increased business brings working capital needs, and that’s where Bibby’s funds comes in.

Next step, is Nucleus Commercial Finance. They’ve announced some tweaks to their Business Growth Loan. Previously, you could have a loan for six months up to a maximum of £25,000. Obviously they are confident about the future, so they’ve now increased that loan term up to 12 months, and you can borrow up to a maximum of £50,000.

Next up, Yorkshire Building Society or YBS Commercial Mortgages. They’ve announced that for their semi-commercial mortgage range they’ve now introduced a 10 year fixed rate. That’s a real sign of confidence they’ve got in the marketplace.

Next up a new lender to the market, Go Business Loans. Go Business Loans have just launched offering limited companies and LLPs loans from £2,500 up to maximum of £20,000. You can apply online and you get notification of the decision within 24 hours. It is great to see a new lender coming into the marketplace, so well done to the team at Go Business Loans.

So overall you can see, it’s not just business owners who are confident about the future; it’s also lenders as well, which is a great signal or a great sign that perhaps better times are around the corner.

Opening a Business Bank Account

Have you tried opening a business bank account over the last 12 months? Well, if you did no doubt it was a highly frustrating experience. The high street banks in particular practically closed their doors to new customers. They just didn’t have the resources and the manpower to cope with the volume of requests for new bank accounts, particularly from sole traders who were trading through a personal account, but realised they needed to have a fully fledged business account in order to qualify for the CBILS and Bounce Back Loans. So as a result, the whole system ground to a halt.

So bad has it been that last week, the Treasury Select Committee actually wrote to a number of the banks being a Barclays, Lloyd’s, Nat West, Metro, Santander and HSBC asking them for comments on their account opening procedures.

They want to know how long does it take to open an account; Have you had any complaints; how you’ve responded to those complaints. Also a killer question, do you intend staying in the small business market?

All of these banks have to reply to the Treasury Select Committee letter by the 19th of May. So it’d be interesting to see what their responses are. I guess the fact that they’ve even received the letter may wake up some of them to think, Hey, we need to get back on track here and make it easy to open a business account. Obviously the economy can’t operate if people don’t have bank accounts, so this is why the government has taken a very keen interest on this.

It will be interesting to see what the response is from the banks and more importantly, what action they’re going to take to make it easier for businesses to open bank accounts.

Business Recovery Improvement

In the first segment of this Bulletin I highlighted that there’s been a definite increase in the feeling of confidence amongst UK small businesses. This has been born out by the latest Lloyds Bank Recovery Tracker. In a review of the 14 sectors that the tracker looks at, 11 of them have said they’ve seen an increase in business in March. In fact, the growth rate has been the highest since September 2020. So we can see there is definitely an increase in levels of activity in the UK economy.

The transport sector particularly, which covers not only logistics, but airlines, rail, and also the bus industry has seen a significant jump in activity. And that’s a really good positive sign that the UK economy is starting to move. So really good news. However, one thing I did cover in the previous bullets in that of course growth brings its own problems and that is access to cash to fuel your working capital need.

So with all of this growth going on, one thing I plead is to make sure that you watch your cashflow. If you need to have access to finance, make sure that you look at all the various options available to you, not just commercial loans, business loans, invoice finance, and asset finance, but also the new Recovery Loan Scheme. All of these are out there designed to support you as you start to grow again.

If you want to chat through any of these finance options, of course, just drop us an email info at businessloanservices.co.uk, and we’ll happily chat through all the various options with you. So great to see that the UK economy is back on the growth path, but watch out for that need for cash.

Closing

That’s it for another Bulletin and as ever I hope you enjoyed watching. If you did, please, don’t forget to give it a like, a share and of course, subscribe to this channel.

As companies start looking ahead to the resumption of business, in the latest Business Finance Bulletin Xtra, we’re talking to John Cullen and Bethan Evans of Menzies, the Accountancy and Business Advisory firm.

With businesses now planning a return to work or gearing up for an increase in sales, we chat about what firms should be considering to future-proof their business; why managing cashflow will be important; and whether now is the time to completely review how you do business.